HLL, P&G Ends Price War

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Monday , March 15, 2004 at 0000 hrs It’s truce so far as the detergent price war is concerned. Both Procter & Gamble (P&G) and Hindustan Lever Ltd (HLL) have said that they will not take any more price cuts on their respective brands — Ariel and Tide, and Surf Excel. The reason is that it will not be feasible to take another price cut, given the current circumstances, as the two rivals are already operating on tight margins.

The fight between the two multinational rivals is now for grabbing market share and mindshare in the growing middle-end of the market. P&G executive director Ashok Chhabra said that the company saw a huge potential of growth in the middle-end of the detergent market which was expected to grow immensely given the new economic growth indicators.

HLL officials had earlier told FE that they view the middle-end of the detergent market as a new growth area which would drive volumes.

“Across categories, P&G will look at offering value proposition and quality products to the consumer. We did that in Whisper sometime back. In shampoos, we did it through the launch of Rejoice, and then we followed it in detergents,” said Mr Chhabra.

At the middle-end of the Rs 5,000 crore detergents market HLL’s and P&G’s brands will compete directly with Nirma, Henko and Ghari. Priced right for the masses, smaller brands like Henko and Ghari, and also Friendly Wash, had become bigger threats for Levers and P&G. By shedding prices in the range of 25-50 per cent, Tide, Ariel and Surf Excel are now better geared to take on the middle-end of the market for marketshare.